Steve Has $500 Automatically Deducted from One of His Paycheques

question 231

Multiple Choice

Steve has $500 automatically deducted from one of his paycheques to purchase Government of Canada Savings Bonds.Based on this information,

• A) Steve's wealth has increased by $500.
• B) Steve's wealth has decreased by $500.
• C) Steve has a capital gain of $500.
• D) Steve has a capital loss of $500.
• E) Steve's wealth is unchanged.

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Definitions:

Federal Reserve District Banks

The 12 regional banks that make up the Federal Reserve System of the United States, each serving a specific geographic area.

Securities

Financial instruments that represent an ownership position in publicly-traded corporations (stocks), a creditor relationship with a governmental body or a corporation (bonds), or rights to ownership as represented by an option.

Bond Prices

are the market value of bonds, which inversely correlate with interest rates; when rates go up, bond prices typically go down, and vice versa.

Interest Rates

The proportion of a total amount of money that is levied for its utilization, typically stated on a yearly basis.